Institute for War and Peace Reporting | Giving Voice, Driving Change

Boom in Sandzak Capital Turns to Bust

Economic collapse in Novi Pazar threatens to expose region’s simmering social and ethnic tensions.
By Dragana Nikolic-Solomon

On market day in Novi Pazar the streets along the riverbank hum with the activity of hundreds of traders touting goods that range from berries, herbs and the region’s famous white cheeses, to sports shoes and leather jackets.


In the clothing section, sellers of imitation Timberland and North Face rucksacks, as well as Puma and Nike tennis shoes, try to tempt passers-by into parting with their cash.


But while the traders are legion, potential buyers are relatively few. The merchants say the good old days are long gone and business has stalled. “I can’t sell these rucksacks even for 10 euro each,” one woman lamented, her weather-beaten face attesting to years spent on outdoor stalls. “Look, these are Timberland – well, they are good copies!”


The market traders offer several reasons for their predicament, from the influx of Chinese rivals, who undercut everyone, to the imposition of customs on the border with nearby Kosovo and Montenegro, which were once the destinations for most of Novi Pazar’s exported clothes.


“I blame the Chinese,” said the unhappy rucksack saleswoman. “We all hate them, though they are good for some with no businesses of their own.”


The grumbles heard in the market echo all over Novi Pazar - a sprawling town of 90,000 - mostly inhabited by Bosniak Muslims, which for centuries has survived on its wits and its inhabitant’s trading skills.


In the 1990s, under the Serb nationalist regime of Slobodan Milosevic, those skills were tested to the limits. With no support from the state, many locals grew surprisingly prosperous on a textile boom, manufacturing quantities of imitation Levi jeans, in particular, for export. Many of these firms started on the proceeds of smuggled goods and petrol from Turkey and Bulgaria – a trade the sanctions-hit Serbian government turned a blind eye to.


But now the local textile industry is in freefall and, according to local economists and NGOs, about 70 per cent of Novi Pazar’s production outlets are scarcely working.


Local analysts agree with some of the complaints cited by the market traders. The economy has suffered from market shrinkage, caused by the break-up of Yugoslavia and then the de facto secession of Kosovo. The arrival of cheap Chinese goods has added to the problems, while other towns in Serbia have now become competitors in clothes production.


Belgrade – never enthusiastic about promoting the Bosniak Muslims of Sandzak – does nothing to alleviate the problem, the analysts agree, though whether the government is motivated by active malice, or plain indifference, is disputed.


Novi Pazar's Muslim leader, Mufti Muarem Zukorlic is in no doubt that Belgrade positively thwarts Sandzak's economic and political progress.


“Serbia is waging a silent war against us,” he told IWPR, from the head office of the town’s new, privately-founded, university, of which he himself is rector. “The people here are seen as an enemy of the state.”


But not everyone believes Novi Pazar’s decline is the fruit of Belgrade’s direct intention. Rasim Lajic, minister for ethnic minorities in the government of Serbia and Montenegro, and head of a local party, the Sandzak Democratic Party, says government neglect of Sandzak – reflected also in minimal press coverage of the region – stems from indifference, not enmity. “It can be a ‘plus’ to be ignored by the Serbia media,” he added, wryly.


“We need to open this area up,” he continued. “It’s a strategic border area, close to Bosnia, Kosovo, Montenegro…but we cannot just live off textiles.”


Lajic’s opinion, shared by many local observers, is that the local merchants invested too heavily in a single industry, believing jean production would guarantee them what he called a “golden age” for ever.


Aida Corovic, of Urban In, a local civic NGO, recalls the impact of the “golden age” very clearly. “I was shocked at how much money there was in the town in the mid-1990s,” she said from her town centre office. “People were just throwing it around.”


The turning point, she remembers, came soon after NATO’s air war with Serbia ended, “The goods were all going to Kosovo, but after 1999, when Kosovo became a protectorate, it all changed. Suddenly we had a smaller market, and also for the first time people were expected to pay taxes.”


One by one, local journalists say, the small factories built in the prosperous 1990s closed their doors; the machines fell silent, the little family firms unable to cushion themselves against the impact of several years of recession.


“The market in Bosnia, Kosovo and Montenegro is virtually closed now,” Ishak Slezovic, of Novi Pazar’s Radio 100 Plus, told IWPR. “Nothing can be taken there now without paying customs and taxes. We are left with too much capacity and a smaller market.” He added, “People who built up a capacity to make 1,000 items a day are only selling around 50.”


The net consequence of the slowdown, Slezovic added, is that average salaries in Novi Pazar have slumped. Once well higher than the Serbian average of around 200 euro a month, they are now only about 150.


Combined with the rumble of confessional and ethnic tension that continues between Orthodox Serbs and Bosniak Muslims beneath the surface of Sandzak society, it becomes clear that the region – if not quite a proverbial Balkan “tinder box” – remains in a fragile state.


Minister Ljajic says Serbia could at least remove some of the discord generated by the uncontrolled, and apparently untaxed, influx of Chinese goods and traders.


“The state is losing about 460 million euro a year owing to the failure to collect import taxes on Chinese goods,” he claimed. “We can’t stop those people coming in, but we could at least rectify that [the taxes].”


Others maintain that Chinese traders, though undoubtedly unpopular (many were attacked in a small riot earlier this year) are a diversion from the town’s deeper economic malaise.


Interestingly, on the day IWPR toured the market in Novi Pazar, the famous Chinese traders were not even visible. If they were present at all, they were well hidden and hardly the crushing economic force that some might lead visitors to believe.


Aida Corovic, of Urban In, is most concerned by the growing radicalisation of both young Serbs and Bosniaks in the Sandzak region. “The chasm is ever greater between the two sides,” she said. “The mistrust is spreading.”


Back at the new university, Mufti Zukorlic says he fears young people are alienated from the Serbian state, and that he may not be able to contain their frustration for ever.


“I can only fight against radicalism and extremism if I have the arguments to do so,” he said. “During the time of [former prime minister Zoran] Djindjic, I had them. But not now.”


Dragana Nikolic-Solomon is IWPR Belgrade project director and Marcus Tanner is IWPR Balkan editor/trainer.